In the News

As 2023 drew to a close, EPA sharply increased its estimates for what climate change costs society. A higher carbon value can help tip the scales in favor of a stronger regulatory option that delivers greater net benefits... “Agencies often leave a more stringent option on the table, even if their own analysis finds that it would yield greater net benefits,” said Max Sarinsky, a senior attorney at the Institute for Policy Integrity at New York University School of Law.

Donald Goodson of the Institute for Policy Integrity at New York University says the Chervon and APA cases, taken together, could have even more of an impact than in isolation. That is because if the Supreme Court overturns or narrows Chevron and then extends the statute of limitations under the APA, that could open up old rules to new challenges, creating massive uncertainty.

The Supreme Court justices have made clear that they intend to use Relentless vs Department of Commerce and Loper Bright Enterprises vs Raimondo to reconsider a seminal decision that has set the rules for legal challenges to federal regulation since 1984. Under the Chevron doctrine, as it is known, courts defer to an agency’s interpretation of federal law when Congress itself has been silent. Don Goodson, a senior attorney at New York University’s Institute for Policy Integrity, warns that businesses should be careful what they wish for. “There are good legal reasons for Chevron and there are good practical reasons . . . Inevitably, federal statutes are sometimes ambiguous,” he says. If different courts reach different conclusions, that could lead to conflicting rules in various parts of the country. “If you are a regulated entity, the question is: do you want one interpretation or several? That may have headaches of its own,” he adds.

The Environmental Protection Agency (EPA) this weekend took action that is expected to justify stricter climate regulations. Max Sarinsky, a senior attorney at New York University’s Institute for Policy Integrity, said that technically, a future president could prevent agencies from using the Biden administration’s social cost values “with the stroke of a pen.” But he also said that doing so could make any rules issued by that administration legally vulnerable.

According to decades’ worth of studies compiled Bethany Davis Noll, litigation director at the Institute for Policy Integrity, federal agencies have historically prevailed in about 70 percent of the legal challenges to their regulatory actions. But Noll’s study reviewing 278 Trump-era agency actions (48 involving immigration) found that federal agencies prevailed only 23 percent of the time.1 And she found that the Trump administration’s immigration policy win rate was only 10 percent (five out of 48 cases).

Max Sarinsky, a senior attorney at New York University School of Law's Institute for Policy Integrity, said there will be some factors on an agency's side as well during future litigation. He said that for one thing, the estimates, which have already been used in many rules and other decisions, go through an extensive process before finalization that incorporates a public comment period, a peer review process and the best available science at the time. "To win an argument that the standard is high, you have to show that it's arbitrary and capricious to use these numbers," Sarinsky said. "So to say that it's arbitrary and capricious to use Nobel Prize-winning work seems a little difficult to me."

The White House on Thursday revised the way agencies weigh regulatory costs and benefits for the first time in 20 years. It resulted in new guidance that experts say will make it tougher for industries to challenge rules on the basis of their economic costs, and easier for agencies to justify stronger safeguards for public health and the environment... “This update certainly supports higher valuations of the social cost of carbon because it is broadly consistent with the approach that EPA is taking,” said [Max] Sarinsky of NYU.

Burcin Ünel, executive director of the Institute for Policy Integrity at New York University School of Law, says the new guidance “will help government agencies catch up to best practices in economics [and] guidance will help ensure that regulators do not ignore equity concerns, which have long been a blind spot in most rulemakings.

The change is consistent with voluminous academic research into discounting, and is “actually a conservative estimate,” said Peter Howard, economics director at the New York University School of Law’s Institute for Policy Integrity. A future administration could raise the discount rate again, but would “have to provide a rational justification” for doing so, Howard said.

After stumbling twice at the Supreme Court, Republicans still want to make the case that the administration has its math wrong on climate change's financial toll. The justices "make it very clear that you can't challenge these valuations in the abstract," said Max Sarinsky, a senior attorney at the Institute for Policy Integrity. "You have to challenge them in their application."